Three ways Covid-19 has changed business banking

The way we do business may be forever changed due to the Covid-19 pandemic, and as we get closer to a year anniversary of the first lockdown it’s a good time to reflect on the main forces of change we have seen in the business world.

Personal relationships are key

Change is inevitable but 2020 certainly brought a decade’s worth at once. Whether an SME in the service industry looking for support to weather the storm or a business looking to innovate and change based on the different market conditions, seeking out guidance and expertise were crucial during this time.

The pandemic has affected every business differently, so specialist banking that dig into the detail of a client’s circumstances allowed many to get the personal service they desperately needed. Business partners that can provide advice and give the human touch in support to the individual business has never been more vital.

The vaccine roll-out and economic recovery will take time, and that recovery will vary depending on industry and size of the business. There will be no quick fixes but what is needed is the development of long-term strategies if SMEs are to recover and thrive, so this personal and bespoke banking will continue to be of great importance for years to come.  

 

Brokers are more vital to SME success and survival

SMEs expect to borrow £48.3bn to help their business recover following Covid-19, according to recent Aldermore research. Understanding all the choices you have available is important to the ability of an SME to weather this period and look at the long-term recovery.   

Nearly a third of SME decision makers who used a broker felt more supported and the process of securing funding was much easier. SMEs can reap several rewards by using a broker, with three out of 10 (28%) stating their business was able to consider multiple options, such as Asset Finance or Invoice Finance, tailored to their needs, alongside advice on products such as the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS).

Brokers provide experience and whole of market view at a time it is most needed as SMEs look at support and recovery from the economic shocks of the Covid-19 pandemic.

 

Building financial buffers are the new priority for SMEs

Two in five (38%) SMEs say they will prioritise business savings more, with industries most impacted by Covid-19, such as food and drink, legal services and manufacturing, being motivated to save more according to Aldermore research.

At the start of the pandemic, many businesses were caught out by the financial impact of lockdown and are now realising just how useful business savings can be as a buffer against the current uncertain situation. As the UK continues to grapple with the challenges of the pandemic, businesses, particularly in some of the worst impacted sectors, should consider business savings accounts to add security against any future shocks.

The Covid-19 pandemic has also motivated many SMEs to become savers, where previously they had not been, with one in 10 (11%) opening a savings account due to the impact lockdown and social distancing guidelines have had on their business.

Surplus cash sitting idle in a business current account is not working hard for SMEs. Shopping around for products with competitive rates that suits the business saving goals will bring benefits in making achieving those financial buffers and building future investment cash easier.

 


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